Section 337 Actions at the ITC: Past, Present, and Future AUSTIN DALLAS HOUSTON LOS ANGELES MARSHALL NEW YORK SILICON VALLEY WASHINGTON, DC Section 337 Actions at the ITC: Past, Present, and Future April 27, 2016 Austin Intellectual Property Law Association Benjamin Levi McKool Smith, P.C. blevi@mckoolsmith.com 202.370.8320

Past • 100th Anniversary of the ITC • U.S. Tariff Commission created on September 8, 1916

Past

Past • Tariff Act of 1916 • §316 of Tariff Act of 1922 • Prohibited “unfair methods of competition and unfair acts” in the importation of articles into the United States, and in their sale after importation

Past • §316 of Tariff Act of 1922 • Applied to actions that threatened to injure a domestic industry that existed or was in the process of being established  

Past • §316 of Tariff Act of 1922   • Empowered the President to fix an additional duty upon the importation of the articles to which the unfair practice relates, or, if he is satisfied the unfairness is extreme, by directing that the articles be excluded from entry

Past • Under§316 of Tariff Act of 1922, first case involved revolvers: • brought by Smith & Wesson • President authorized temporary relief the same day petition filed

Past • Ex parte Bakelite Corp., 279 U.S. 438 (1929) • Frischer Co. v. Bakelite Corp., 39 F.2d 247 (CCPA 1930) • “We are, therefore, of opinion that there is no valid objection to said section 316 as an unconstitutional delegation of legislative authority to the President.” • “The provision relating to unfair methods of competition in the importation of goods is broad enough to prevent every type and form of unfair practice and is therefore a more adequate protection to American industry than any antidumping statute the country has ever had.” (quoting Senate Finance Committee report).

Past • Frischer Co. v. Bakelite Corp., 39 F.2d 247 (CCPA 1930) • “[I]t is very obvious that it was the purpose of the law to give to industries of the United States not only the benefit of the favorable laws and conditions to be found in this country, but also to protect such industries from being unfairly deprived of the advantage of the same and permit them to grow and develop.”

Past • Smoot-Hawley Tariff Act of 1930 • §337 of 1930 Act superseded §316 of 1922 Act

Past • 1974 Amendments • 1988 Amendments • GATT, 1994

Past • 1974 Amendments • created “U.S. International Trade Commission” • gave ITC power to impose remedies

Past • 1988 Amendments • removed injury requirement • added subsection (C)

Past • 1988 Amendments • an industry in the United States shall be considered to exist if there is in the United States, with respect to the articles protected by the patent, copyright, trademark, mask work or design concerned – (A) significant investment in plant and equipment; (B) significant employment of labor or capital; or (C) substantial investment in its exploitation, including engineering, research and development, or licensing.

Past • GATT, 1994 • Defendant can automatically stay district court litigation involving “same issues” as ITC investigation (28 U.S.C. § 1659)

Present

Present https://www.usitc.gov/intellectual_property/337_statistics_number_new_completed_and_active.htm

Present https://www.usitc.gov/press_room/documents/featured_news/337facts.pdf

Present • eBay v. MercExchange, 547 U.S. 388 (2006)

Present • Domestic Industry requirement • economic prong • technical prong

Present • Economic prong • complainant (i.e., plaintiff) can rely on its own product and expenditures, or on the product and expenditures of its licensees • domestic industry is determined as of the date the Complaint is filed (although there are exceptions)

Present • Technical prong • the domestic industry article must practice any single claim of the asserted patent • subsection (c) investments should be targeted in patented aspect of article

Present • Design-arounds A Complainant should fully consider potential for design-arounds before filing Complaint Commission’s pilot program on adjudication of design-arounds: www.usitc.gov/press_room/documents/featured_news/33 7modprocpilot_fs_final.doc

Present • 100-day program to address potentially case-dispositive issues

Present • Electronic Transmissions ITC’s jurisdiction does not include “imported” electronic data ClearCorrect Operating LLC v. International Trade Commission

Future • Study the past if you would define the future --Confucius • Those who cannot remember the past are condemned to repeat it --George Santayana

Future

Future?

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Future? . . . Continued

Future? • Rep. Cardenas Bill

Future?

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Contact Benjamin Levi McKool Smith, P.C. blevi@mckoolsmith.com 202.370.8320

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